Twitter monetisable daily active user hits 237.8m as firm spent $33m on Musk deal
Microblogging platform, Twitter grew its monetisable daily active user (mDAUs) by 16.6 per cent on a year-on-year basis to 237.8 million, though the figure fell marginally shot of estimates, pegged initially at 238.08 million.
In its Quarter two (Q2) financial report, released at the weekend, Twitter disclosed that it has spent $33 million on the ongoing Elon Musk’s acquisition deal, which has been subject of serious allegation.
Already, Twitter’s lawsuit to hold Musk to his $44 billion takeover of the microblogging site will go to trial in October after a Delaware judge said that the social media company deserved a quick resolution of the deal’s uncertainty.
In the Q2 result, Twitter said revenue slid one per cent year over year to $1.18 billion. The company partially blamed the revenue drop on ad industry headwinds tied to the broader challenging macroeconomic environment, as well as “uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk.”
Twitter and other social media companies with a heavy reliance on advertising have felt the weight of economic challenges, as fears around inflation, interest rate concerns, continued supply chain issues and the war in Ukraine led some advertisers and brands to adjust their ad spend.
Last Thursday, Snap reported disappointing second-quarter results, and said it plans to slow hiring due to weakening revenue growth, causing its shares to plunge 25 per cent in extended trading.
Given the pending acquisition by Musk, Twitter said it will not provide forward-looking guidance for the third quarter. It’s also not hosting a conference call with analysts to discuss the earnings results.
Costs and expenses during the quarter ballooned 31 per cent year over year to $1.52 billion. The company swung to a loss of eight cents per share, reporting its first adjusted loss in two years and the second in its history.
Twitter said costs related to the Musk acquisition were approximately $33 million in Q2. Severance-related expenses were approximately $19 million in the second quarter. Twitter is locked in a legal battle with Musk over his proposed $44 billion acquisition of the company. The Tesla CEO has tried to back out of the deal. Musk claims Twitter underreported the number of spam and fraud accounts and failed to provide information about fake accounts. Twitter sued Musk and some of his associates earlier this month over allegations the billionaire “refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
Further analysis of the report showed that Twitter had operating loss of $344 million, representing a -29 per cent operating margin, compared to operating income of $30 million or three per cent operating margin in the same period last year.
Net loss was $270 million, representing a net margin of -23 per cent and diluted EPS of -$0.35. This compares to net income of $66 million, a net margin of six per cent and diluted EPS of $0.08 in the same period last year.
Net cash provided by operating activities in the quarter was $30 million, compared to $382 million in the same period last year. Capital expenditures totaled $154 million, compared to $276 million in the same period last year.